The companies say that this new venture will enable them to “combine and maximize their technology to supply energy-saving, low-cost LED products, in order to contribute to worldwide environmental protection.”

The JV is expected to be established in December 2012, with the tentative name TS Opto Co., Ltd. Toyoda Gosei will have 70% ownership of the JV, with Showa Denko owning the remainder. The scheduled capitalization of the business is JPY 490 million ($6 million).

The joint venture will be established in the area of GaN-based LED chips being produced at SDK’s plant in Chiba Prefecture, Japan. Showa Denko also manufactures AlGaInP-, GaAs and GaP-based LED chips, and will continue its independent operations in these areas.

By establishing a joint venture with Toyoda Gosei for the GaN LED business, SDK says that it will “further strengthen our relations with Toyoda Gosei and expand overall supply capacity. At the same time, we will aim to achieve synergistic effect in R&D, improving brightness and production efficiency.”